This is Brilliant.... The Personal Income Redistribution Plan (PIRP)

Sometimes when I’m idle, magnificent ideas come to me.  I should probably be idle less, but not this time.  While watching the news recently and being harassed by stories regarding three totally different subjects I hit upon a combination strategy that will prove revolutionary to the future of mankind.  And that’s being modest.  The NFL Draft, college graduation time and President Obama’s income redistribution stories all melded into a plan to save our planet.  I call it the Personal Income Redistribution Plan (PIRP).  You’re gonna love it!

Now, some details need to be worked out, but here’s the gist… when a student graduates from college he or she is eligible to be drafted by an individual or a corporation for a negotiated price.  This price, the “Investment”, is paid immediately to the graduate and legal documents are signed obligating the graduate to pay 10% of his / her earnings to the investor for the next ten years.  This is the Classic PIRP Arrangement.  So, if my child is graduating from Vanderbilt with a degree in Law, an investor from Chicago might decide that her PIRP value is $50,000.  And if she earns an average of $100,000 per year over the next ten years, the investor’s payback is 10% of that each year and he has doubled his money in ten years.  Not a bad investment.  And my daughter suddenly has $50,000 as she graduates from college so she can pay down her student debt, get married, buy a horse… whatever. 

This is gambling, but it’s gambling with an edge.  Maybe the investor will work to help get my daughter interviews with white-shoe firms in New York where she can earn the big bucks.  That would be good for both of them.  Or the investor could offer career advice over the period of his investment.  If my daughter decides to be a public defender in Murfreesboro, it’s likely the investor will be disappointed.  But he’s only negotiated for 10% of her income so it’s not like he can demand a different path.

This is BRILLIANT!  Admit it.  Unemployment for the young PIRP graduate (the ‘asset’) will go down as a savvy investor is suddenly motivated financially to keep them employed.  To keep them progressing forward.

I see an entire industry starting up with armies of actuaries and consultants advising both assets and investors.  PIRP Mutual Funds of a sort can be created whereby the entire Class of ’14 at the University of Alabama Vet School is offered $10,000,000 to be divided equally by its graduates.  And small investors like me can buy into a share of this Fund.  Heck there could even be mortgages I could take out allowing me to invest big bucks in my nephew graduating from Yale.  He’d get a six figure PIRP payout and I’d hope for a positive return after the mortgage interest.

Maybe Foundations will be set up for the Arts and History majors.  We need those folks, just don’t expect a decent ROI.

There will be flops in this draft and there will be home runs.  What if you could have negotiated to buy Mark Zuckerberg’s PIRP for $350,000 as he graduated from Harvard?  I’m just sayin………….

The real beauty of this system comes in down at the minor leagues; high school graduates.  If a high school graduate announces he is available for the PIRP draft with no plans for college, his value may only be $15,000.  But that’s a lot for a young person wanting to get his own apartment or start a business.  Investors are advised to be hands-on with this group and to diversify into a multitude of candidates.  Earning potentials for high school graduates are lower and often non-existent.  But money can be made.

We can all think back to what our own PIRP value would have been when we graduated from college or high school.  I think in my first ten years I earned about $250,000 total.  But maybe Uncle Dick or the PIRP Investment Group from Boston would have seen my potential as better and offered me $50,000 for my future.  That would have been stupid, but it might have happened if I negotiated well and wore a clean shirt.  Or maybe my highest bid would have been a more realistic $600 (from Brother Peter).  I’d have the opportunity to accept or decline.  Trust me, I could have really, really used $600 in 1974, but I refuse to be beholdin’ to Brother Peter.  Looking back though, that $600 investment for 10% of my earnings over the next decade would really, really paid off.  No wait.  That’s not true at all.  I was thinking of Brother Joe.  Oh well, you never know…..

Of course, maybe there could be an aftermarket.  For young people who hold out until their first job offer, their PIRP value could go up or down when they finally put themselves up for bid.  Honestly, I think this could change the entire structure of capitalism as we see it.  Peace Corp Volunteers could postpone their draft until they return from Pleasescratchthistan, then auctioning their income for thousands as they’ve proven themselves worldly and not some slacker.  “What’s my offer for a Peace Corp Alum with a 4.0 in finance and a godfather at Goldman Sachs?  Do I hear $400,000?!  Who’ll make it more?”